US judge slashes $9 bln award vs Takeda, Lilly over diabetes drug

Oct 27 (Reuters) - A U.S. judge on Monday slashed a $9
billion punitive damages award to $36.8 million against Takeda
Pharmaceutical Co and Eli Lilly & Co over their
Actos diabetes drug, although she rejected their request for a
new trial.

U.S. District Judge Rebecca Doherty in Louisiana in a court
filing granted a motion from the drugmakers to reduce the $9
billion in combined punitive damages awarded earlier this year.

In the first federal case to go to trial in a consolidated
group of lawsuits, the companies were accused of failing to warn
users that Actos could raise the risk for bladder cancer.

In her ruling, Doherty said the original $9 billion damages
award was "excessive" and violated the companies' constitutional
rights to due process.

She ordered Takeda to pay $27.6 million and Eli Lilly to pay
$9.2 million for a total of $36.8 million. Doherty said that,
while far smaller than the jury's original award, the reduced
punitive damages were still "large enough to accomplish the
jury's clear aim: to send a message to the defendants that their
wrongdoing must stop..."

The $9 billion in punitive damages was among the largest
ever from a U.S. jury. Legal experts doubted it would stand,
since appellate courts and the U.S. Supreme Court typically
reject punitive damages that are vastly out of proportion to
compensatory damages.

In her ruling, Doherty urged the higher courts to give more
guidance on whether there should be an upper limit to punitive
damages when a jury finds defendants engaged in "seriously
reprehensible behavior."

The companies also had sought a new trial, arguing that the
court had made prejudicial rulings on evidence and jury
instructions that tainted the trial's outcome.

Doherty rejected that request Monday, writing that the
evidence during the trial showed that the companies
"disregarded, denied, obfuscated and concealed" for more than a
decade that Actos could increase patients' risk for bladder
cancer.

Takeda's U.S. general counsel, Kenneth Greisman, said they
viewed the reduced award as a "step in the right direction," but
would continue to challenge the verdict on appeal."

Lilly's general counsel, Mike Harrington, said in a
statement that the company would continue to fight the verdict.
"While we have empathy for the plaintiff, we believe the
evidence did not support his claims," he said.

Plaintiffs' lawyer Richard Arsenault called the ruling
"thorough" and noted its focus on the need for "meaningful
deterrence for these multi-national, billion-dollar
corporations."

Actos, an oral medication used to regulate blood sugar
levels in patients with type-2 diabetes, has been on the market
since 1999. Lilly, which co-promoted Actos from 1999 to 2006,
has said it will be indemnified by Takeda for its losses and
litigation expenses.

The case, brought by plaintiff Terrence Allen, is among more
than 3,700 consolidated before Doherty. The companies face
thousands of additional lawsuits in state courts.

The jury had also awarded Allen $1.475 million in
compensatory damages, which both parties agreed to reduce to
$1.27 million.